If the Depreciable Investment Is $1,000,000 and the MACRS 5-Year

question 38

Multiple Choice

If the depreciable investment is $1,000,000 and the MACRS 5-Year class schedule is: Year-1: 20%; Year-2: 32%; Year-3: 19.2%; Year-4: 11.5%; Year-5: 11.5% and Year-6: 5.8% Calculate the depreciation tax shield for Year-2 using a tax rate of 30%:

• A) $224,000
• B) $60,000
• C) $96,000
• D) $300,000

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